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EPA: Decision on ethanol waiver expected soon

The U.S. Environmental Protection Agency (EPA) said on Tuesday that it will soon have a decision on whether to waive the ethanol mandate. According to a Reuters report, "EPA is completing its review and analysis of the Renewable Fuels Standard (RFS) waiver requests and the agency plans to reach a decision shortly," an agency spokeswoman said.

In comments to the EPA last month, the National Pork Producers Council (NPPC) said EPA should grant a waiver of the federal requirement for the production of corn ethanol because the mandate, coupled with a summer drought that has reduced yields and pushed up prices of feed grains, is causing severe economic harm to pork producers. Click here to read NPPC’s comments.

The RFS requires 13.2 billion gallons of ethanol to be made from corn this year and 13.9 billion gallons in 2013. The amounts will use about 4.7 billion and 4.9 billion bushels, respectively, of the nation’s corn crop.

The USDA estimates that just 10.7 billion bushels of corn will be harvested this year, down 1.6 billion bushels from 2011.

With the RFS, NPPC pointed out in its comments, a weather-driven supply shock no longer simply results in higher prices for feed grains but causes “explosively higher prices, crippling credit and liquidity shortfalls and the frightening prospect that some producers cannot assure stable access to corn to feed their animals.”

Last summer, seven governors asked the EPA to temporarily waive the mandate on ethanol because the drought has driven corn prices higher and hurt livestock producers who depend on the grain for feed. Forty percent of the U.S. corn crop is used to make ethanol.

In 2008, EPA denied a request from Texas to relax the mandate during a period of surging corn prices. Ethanol trade groups say they expect the same ruling this time.